UK's new government seeks to boost fighter jet program with Canadian partnership

British defence stocks including BAE Systems BAES.L and Babcock BAB.L jumped by 3% and 6% respectively on Tuesday as markets bet the companies would benefit from the new government's willingness to make Britain more war-ready.

Healey, formerly the defence minister, had previously spent months lobbying the former prime minister to lay out a pathway to spend 3% of GDP on defence by 2030, rather than the 2.68% that the government eventually budgeted for.

"As Defence Secretary, John Healey championed British business, recognising the contribution that the defence sector makes to growth and national security," BAE Systems CEO Charles Woodburn said.

"We look forward to continuing to work with John in his new role as UK Chancellor."